Goodwill and Other Intangible Assets

9 Months Ended

Nov. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

5. Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses and is not amortized. Goodwill and indefinite-lived intangibles are evaluated for impairment on an annual basis as of November 30 of each year, or more frequently if impairment indicators arise, using a fair-value-based test that compares the fair value of the asset to its carrying value. The Company is currently still in the process of evaluating and will complete its annual impairment analysis during the fourth quarter of this fiscal year. As of November 30, 2015, there were no indications of impairment that would require an impairment charge to be taken in the current period. Goodwill and other intangible assets are tested for impairment at a reporting unit level, which the Company has determined is at the Print Segment and Apparel Segment level. The impairment test for goodwill uses a two-step approach. Step one compares the fair value of the reporting unit to which goodwill is assigned to its carrying amount. If the carrying amount exceeds its estimated fair value, a potential impairment is indicated and step two is performed. Step two compares the carrying amount of the reporting unit’s goodwill to its implied fair value. In calculating the implied fair value of reporting unit goodwill, the fair value of the reporting unit is allocated to all of the assets and liabilities, including unrecognized intangible assets of that reporting unit based on their fair values, similar to the allocation that occurs in a business combination. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. If the implied fair value of goodwill exceeds the carrying amount, goodwill is not impaired. The Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets in assessing the recoverability of its goodwill and other intangibles. If these estimates or the related assumptions change, the Company may be required to record additional impairment charges relating to these assets in the future.

The cost of intangible assets is based on fair values at the date of acquisition. Intangible assets with determinable lives are amortized on a straight-line basis over their estimated useful life (between 1 and 15 years). Trademarks and trade names with indefinite lives are evaluated for impairment on an annual basis, or more frequently if impairment indicators arise. The Company assesses the recoverability of its definite-lived intangible assets primarily based on its current and anticipated future undiscounted cash flows.

The carrying amount and accumulated amortization of the Company’s intangible assets at each balance sheet date are as follows (in thousands):


As of November 30, 2015	Weighted Average Remaining Life *(in years)*		Gross Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets
Trade names		—	$	1,234	$	1,234	$	—
Customer lists		8.9		75,518		31,876		43,642
Noncompete		2.1		75		23		52
Patent		2.3		783		489		294

Total		8.9	$	77,610	$	33,622	$	43,988


As of February 28, 2015
Amortized intangible assets
Trade names	—	$	1,234	$	1,234	$	—
Customer lists	9.6		74,670		27,486		47,184
Noncompete	2.8		75		4		71
Patent	3.0		773		392		381

Total	9.5	$	76,752	$	29,116	$	47,636


	November 30, 2015		February 28, 2015
Non-amortizing intangible assets
Trademarks and trade names	$	28,591	$	28,591

Amortizing and non-amortizing intangible assets by segment as of the date indicated are as follows (in thousands):


	November 30, 2015
Category	Print Segment		Apparel Segment		Total
Amortizing intangibles, net	$	38,122	$	5,866	$	43,988
Non-amortizing intangibles		15,291		13,300		28,591

Total	$	53,413	$	19,166	$	72,579


	February 28, 2015
Category	Print Segment		Apparel Segment		Total
Amortizing intangibles, net	$	40,670	$	6,966	$	47,636
Non-amortizing intangibles		15,291		13,300		28,591

Total	$	55,961	$	20,266	$	76,227

Aggregate amortization expense for the nine months ended November 30, 2015 and November 30, 2014 was $4.5 million ($3.4 million – Print and $1.1 million – Apparel) and $4.2 million ($3.1 million – Print and $1.1 million – Apparel), respectively.

The Company’s estimated amortization expense for the next five fiscal years ending in February of the stated calendar year is as follows (in thousands):


	Print Segment		Apparel Segment		Total
2017	$	4,666	$	1,467	$	6,133
2018		4,452		1,467		5,919
2019		3,935		1,467		5,402
2020		3,847		1,099		4,946
2021		3,778		—		3,778

Changes in the net carrying amount of goodwill as of the dates indicated are as follows (in thousands):


	Print Segment		Apparel Segment			Total
Balance as of March 1, 2014	$	59,284	$	55,923		$	115,207
Goodwill acquired		5,205		—			5,205
Goodwill impairment		—		(55,923	)		(55,923	)

Balance as of February 28, 2015		64,489		—			64,489
Goodwill acquired		48		—			48
Goodwill impairment		—		—			—

Balance as of November 30, 2015	$	64,537	$	—		$	64,537

During the fiscal year ended February 28, 2015, $12,000 was added to goodwill related to the adjustment of the fair values of certain Wisco assets, $945,000 was added to goodwill related to the acquisition of Sovereign, $4.2 million was added to goodwill related to the acquisition of Kay Toledo, and an adjustment of ($55.9 million) reflects an impairment charge related to goodwill recorded in the Apparel segment. During the nine months ended November 30, 2015, $48,000 was added to goodwill related to the acquisition of Sovereign.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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